Prime Minister David Cameron attacked the U.K. Independence Party for seeking to use Tuesday’s terrorist attacks in Brussels to make the case for Britain to leave the European Union.
UKIP’s defense spokesman, Mike Hookem, issued a statement saying the “horrific act of terrorism” showed that EU free-movement rules and “lax border controls” are “a threat to our security.” Britain votes on June 23 on whether to leave the EU.
“It’s not appropriate at this time to make any of those sorts of remarks,” Cameron told reporters in televised comments from his Downing Street office in London. “Today is a day for sympathy and condolence, for enhancing our own security.”
Cameron has used the collective security provided by membership of the EU as a key plank of his campaign to stay in the 28-nation bloc, prompting Hookem’s comments and criticism from other opponents after Tuesday’s attacks.
With Britain’s referendum on the European Union exactly three months away, Bank of England officials are agonizing over the dangers from a vote to leave. Just two weeks after the governor declared an exit vote as the biggest domestic risk to financial stability, officials can now ratify contingency planning for a threat that has rattled investors enough to force a plunge in the pound and a spike in sterling volatility.“Without a doubt, Brexit is the top of everyone’s agenda until June, and possibly after if we do vote to leave,” said Alan Clarke, an economist at Scotiabank in London. – “The FPC’s mandate is the financial system, so they’ll be looking at whether banks will be able to continue to do their business if there is a vote to leave. They may also talk about other risks to the financial sector, whether there would be an exodus of firms.”
The BOE’s key interest rate has been a record-low 0.5 percent for seven years and, with a hike probably still some time away, the onus is on the FPC to keep imbalances in check. The central bank is already drawing up contingency plans for a British exit from the EU and will offer extra liquidity to the financial system around the referendum.
Chancellor of the Exchequer George Osborne singled out the 10-member FPC last week in his budget speech, asking it to be “particularly vigilant in the face of current market turbulence.” The committee will publish a statement from its meeting on March 29.
“The BOE will be considering where we are in the credit and economic cycle and what we need to do to lean into it,” -said Mick Grady, an economist at Aviva Investors and a former BOE official. “When rates have been so low for a very long time, the cracks start getting a bit wider.”
Housing is also likely to feature, with mortgage lending surging and prices rising. After the FPC’s December meeting, Carney cited the commercial and buy-to-let real-estate markets, as well as household debt and the current-account deficit, as signs that stability risks were increasing.
Charles Goodhart, a former BOE policy maker, has said recent mortgage figures suggest there’s “a lot of potential heat in housing.”